KB Kookmin bankers stage first strike in 19 years over wage dispute

Banking operation at South Korea’s largest commercial lender KB Kookmin Bank came to a virtual stop Tuesday as its union staged its first walkout in 19 years after wage negotiations with the management fell through.

More than 10,000 workers, roughly two-thirds of the entire union, did not show up at work, disrupting operations at about 600 outposts. The bank, in anticipation of the walkout, had stationed emergency staff in 411 out of its total 1,057 branches.

The two sides remain fiercely divided over the wage peak system, a scheme to gradually cut salaries of senior employees after a certain age to postpone retirement. The union wants to delay the introduction of the policy by a year while management is only willing to offer a six-month waiver period for rank-and-file workers.

Workers are also calling for a bonus equivalent to 300 percent of the normal wage, while management insists a payment adjustment is needed because they failed to meet the business target last year. To clarify the standards for bonus payment, management has proposed defining the bonus amount in tandem with the bank’s return on equity, but this has been rejected by the union.

Another point of conflict is the so-called pay band system, which limits the base salary of employees who have failed to be promoted after a certain period of time. The union has been trying to scrap the policy while management has been seeking ways to expand it to other ranks beyond new recruits.